Auto Loan: Refinance vs Trade-In

Hi, i need some help with this question, i've been going back and forth and can't decide what the best thing to do is.

I bought a Chevy Tahoe in March, i still owe $30,000 on the note and have it financed with a 10% with NFCU. My payments are high, almost 600.00/mo and for now i've been managing but i have very little money left from my paychecks. (I got this SUV one week before finding out i was prego so i was stuck with it, if i would've known i would've gotten something cheaper) Anyway, here are the details:

Owe: $30,047

Interest: 10%

Credit Score: 649

Car Value: $33,515 (private party value)

$30,175 (trade-in value)

Co-Signer CS: 749

The issue is that i don't need this big SUV, and i really can't afford the payments with the baby coming, forget about the fact that it's a GAS GUZZLER!!!

My "baby daddy" can co-sign for me on another vehicle if we decide to trade-in, he has a way better score than me and no negative accounts but i don't know if it's better to refinance or just trade it in. I'm not complaining about the interest rate as it is pretty good compared to others but the payment is still too high and i don't know how much longer i'll be able to afford this note. The truck is worth more than i owe, whether it's private party or trade-in (not by much with trade in but my total should go down by $100 tuesday), so i don't know what the best decision is. BTW, i'm planning on going on a much cheaper car, $20,000 - $23,000. Any help is appreciated as my head is spinning in circles already with all the expenses i keep thinking about!! thanks much!!!

Re: Auto Loan: Refinance vs Trade-In

Hi, i need some help with this question, i've been going back and forth and can't decide what the best thing to do is.

I bought a Chevy Tahoe in March, i still owe $30,000 on the note and have it financed with a 10% with NFCU. My payments are high, almost 600.00/mo and for now i've been managing but i have very little money left from my paychecks. (I got this SUV one week before finding out i was prego so i was stuck with it, if i would've known i would've gotten something cheaper) Anyway, here are the details:

Owe: $30,047

Interest: 10%

Credit Score: 649

Car Value: $33,515 (private party value)

$30,175 (trade-in value)

Co-Signer CS: 749

The issue is that i don't need this big SUV, and i really can't afford the payments with the baby coming, forget about the fact that it's a GAS GUZZLER!!!

My "baby daddy" can co-sign for me on another vehicle if we decide to trade-in, he has a way better score than me and no negative accounts but i don't know if it's better to refinance or just trade it in. I'm not complaining about the interest rate as it is pretty good compared to others but the payment is still too high and i don't know how much longer i'll be able to afford this note. The truck is worth more than i owe, whether it's private party or trade-in (not by much with trade in but my total should go down by $100 tuesday), so i don't know what the best decision is. BTW, i'm planning on going on a much cheaper car, $20,000 - $23,000. Any help is appreciated as my head is spinning in circles already with all the expenses i keep thinking about!! thanks much!!!

Unfortunately, you cannot easily get out of this situation if you are upside-down on a vehicle, though it sounds like you do have a little equity. If you have equity then I would suggest trading it in for a used small car absolutely not a new car, new cars are an expensive luxury for those who can afford them.

Once you have traded your current vehicle in for an economy car (you should be able to find a decent used car for well under $10K), then try to pay it off ahead of schedule so you can start putting the amount of your car payment into savings. Resolve to keep the replacement car until you have enough cash to buy its replacement without borrowing.

At this stage I would not worry about fuel costs for a while, just do the math: if you drive 20K miles per year at 16MPG and $3 per gallon that's a few hundred bucks per month for fuel, your big concern is the cost of the car itself, so don't get a new car just because it has better gas mileage. Rolling the debt into a new vehicle loan just compounds your problem at a much higher cost. If you can refinance to get the interest rate down that could help somewhat (though the benefit from a refi would be modest since your APR isn't terrible), but your real concern is whether you are upside down.Go to www.bankrate.com and click on calculators to find some loan calculators that will help you plan. Do check the contract on your loan carefully, in case there is a prepayment penalty clause before making any decisions (prime loans tend not to have such clauses, but subprime loans often do because they don't want those who improve their credit to escape by refinancing). If there is a prepayment penalty then you need to read the details carefully. With a 10% APR with NFCU probably you don't have a prepayment penalty but do check the fine print.

Re: Auto Loan: Refinance vs Trade-In

You bought too much payment even before being pregnant entered the picture.

You owe 30K

What are you looking to trade into?

I do not care what KBB says, I doubt that you will see 30K on a trade in. maybe private party.

but even if you took a 5K loss and rolled 5K in negative into a new car at say financing 23K, you will be at 500 a month

Your problem is going to be

1- trading in your old car and minimizing negative equity

2- Then Finding a new car you can bury the negative in and that still fits your lifestyle

Thats what you need to consider

I mean lets see, current Tahoes either have 0% or 4K in rebates.

So if a dealership gives you 30K for your new one, they have to price it to compete with new ones that get 4K in rebates or Zero percent financing. and when new ones (base I will admit) start at 33k after rebates...there really is not that much room in it for them to make any profit and make the dea llook good for a used car customer.

Sorry.

unless the Tahoe you owe 30k on had a MSRP of 41K or more I do not see you getting that 30K for it.

Signature line begins:Credit is not a right, but a business transaction, one that takes into account risk, and charges accordingly based on that risk.Your credit score is an aspect of your credit profile. Important? yes but just an aspect. Contributing/supplemental information determines the finer point of the deal. Ask any question, respect me not to get mad if the answer is not the affirmation you are looking for,

Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

† Credit cards for FICO Score ranges: The score ranges are guidelines based on internal myFICO analysis of actual applicant approvals, and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range. These ranges were not provided by any card issuer.

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair
organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or
assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.